Understanding Business
12th Edition
ISBN: 9781259929434
Author: William Nickels
Publisher: McGraw-Hill Education
expand_more
expand_more
format_list_bulleted
Question
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by stepSolved in 3 steps
Knowledge Booster
Similar questions
- TheWod Chemical Company produces a chemical compound that is used as a lawn fertilizer. The compound can be produced at a rate of 10,000 pounds per day. Annual demand for the compound is 0.6 million pounds per year. The fixed cost of setting up for a production run of the chemical is $1,500, and the variable cost of production is $3.50 per pound. The company uses an interest rate of 22 percent to account for the cost of capital, and the costs of storage and handling of the chemical amountto 12 percent of the value. Assume that there are 250 working days in a year.a. What is the optimal size of the production run for this particular compound?b. What proportion of each production cycle consists of uptime and what proportion consists of downtime?c. What is the average annual cost of holding and setup attributed to this item? If the compound sells for $3.90 per pound, what is the annual profit the company is realizing from this item?arrow_forwardYou are a corn producer. Today, May 1, you have planted corn and you expect a crop of over 1,500,000 bushels. You would like to sell the crop soon after the October harvest. You are fairly certain that prices are heading down, so you want to lock in a price for December delivery. The performance bond deposit of $1,000.00 per contract and possible performance bond calls will not cause you a cash-flow problem. You decide to sell three hundred December corn futures contracts (5,000 bushels each, or 1,500,000 bushels). The December futures price today is $5.6125 and the local forward cash for December is $5.2125. Brokerage fees for each contract is $25.00 round-turn. In December, futures prices have fallen to $5.6000 and cash prices to $5.2000. Date Cash Market Futures Market Basis May December Results In May do you take a long or short position in the futures market? In December, what do you do in the futures market?…arrow_forwardAn annuity pays $25,000 semiannually (every 6 months) for 12 years. An alternative investment’s APR is 10% with quarterly compounding. What is the value of this annuity?arrow_forward
- You have just received a business valuation report that is dated six months ago. Describe the factors that might have changed during the past six months and, therefore, caused the value of the business today to be different from the value six months ago. Which of these changes affect the expected cash flows, and which affect the discount rate that you would use in a discounted cash flow valuation of this company?arrow_forwardWhich one of the following functions that goldsmiths performed was most important in the development of modern-day fractional reserve banking? Goldsmiths stored gold for people in their vaults. Goldsmiths issued paper receipts to people who stored gold in the goldsmiths’ vaults. By issuing additional paper receipts, goldsmiths made loans to people who did not necessarily have gold deposits. The paper receipts issued by the goldsmiths were accepted by merchants as a means of payment.arrow_forwardAn institution which has responsibility for financial affairs on the property of others is known as ΟΛ fiduciary financial institution brokerage firm ball bond B. O C. O D.arrow_forward
- Restricted stock is Multiple Choice a special type of stock that is not transferable from the current holder to others until specific conditions are satisfied. a special type of stock that can be converted into corporate bonds after a specific amount of time has elapsed. a special type of stock that is a result of offering an employee stock ownership plan.arrow_forwardIf a company would like to reduce its average collection period, it can either offer a cash discount or increase net terms. True or false ? and why?arrow_forwardJerry spends his days originating loans in the primary mortgage market. He originates them, but the financing comes from a lender that Jerry partners with. This is because Jerry doesn't have funds of his own to lend. What job does Jerry most likely have? private lender mortgage banker credit union associate mortgage brokerarrow_forward
- Your options for shipping $104,800 of machine parts from Baltimore to Kuala Lumpur, Malaysia, are (1) use a ship that will take 30 days at a cost of $3,370, or (2) truck the parts to Los Angeles and then ship at a total cost of $5,030. The second option will take only 18 days. You are paid via a letter of credit the day the parts arrive. Your holding cost is estimated at 30% of the value per year. If you have a third option and it costs only $4,080 and also takes 18 days, what is your most economical plan? Part 2 The daily holding cost of Alternative 1 is $________. (Enter your response rounded to two decimal places.) Part 3 The daily cost of faster shipping with Alternative 2 is $________. (Enter your response rounded to two decimal places.) Part 4 The daily cost of faster shipping with Alternative 3 is $________. (Enter your response rounded to two decimal places.) Part 5 ▼ Alternative 1? Alternative 2? Alternative 3? is more economical.arrow_forwardTrue or false 1. Interest Rate Parity allows a company to lock in profits by borrowing in the low interest rate currency and investing in the high interest rate currency? 2. When calculating Days Sales Oustanding, it is important to include all credit and cash sales in the equation.arrow_forwardManufacturing businesses at some point will need to invest in capital equipment, in the form of machinery, vehicles, buildings and other equipment. Capital equipment investment is decision premised up complex financial and operational requirements, but it is a decision no business can avoid permanently. Mosetsana Pads has currently outsourced the manufacturing and distribution of their products, but they are considering bringing both aspects back in-house, since the business is growing and has garnered enough market share to warrant that level of expenditure and expansion.arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- Understanding BusinessManagementISBN:9781259929434Author:William NickelsPublisher:McGraw-Hill EducationManagement (14th Edition)ManagementISBN:9780134527604Author:Stephen P. Robbins, Mary A. CoulterPublisher:PEARSONSpreadsheet Modeling & Decision Analysis: A Pract...ManagementISBN:9781305947412Author:Cliff RagsdalePublisher:Cengage Learning
- Management Information Systems: Managing The Digi...ManagementISBN:9780135191798Author:Kenneth C. Laudon, Jane P. LaudonPublisher:PEARSONBusiness Essentials (12th Edition) (What's New in...ManagementISBN:9780134728391Author:Ronald J. Ebert, Ricky W. GriffinPublisher:PEARSONFundamentals of Management (10th Edition)ManagementISBN:9780134237473Author:Stephen P. Robbins, Mary A. Coulter, David A. De CenzoPublisher:PEARSON
Understanding Business
Management
ISBN:9781259929434
Author:William Nickels
Publisher:McGraw-Hill Education
Management (14th Edition)
Management
ISBN:9780134527604
Author:Stephen P. Robbins, Mary A. Coulter
Publisher:PEARSON
Spreadsheet Modeling & Decision Analysis: A Pract...
Management
ISBN:9781305947412
Author:Cliff Ragsdale
Publisher:Cengage Learning
Management Information Systems: Managing The Digi...
Management
ISBN:9780135191798
Author:Kenneth C. Laudon, Jane P. Laudon
Publisher:PEARSON
Business Essentials (12th Edition) (What's New in...
Management
ISBN:9780134728391
Author:Ronald J. Ebert, Ricky W. Griffin
Publisher:PEARSON
Fundamentals of Management (10th Edition)
Management
ISBN:9780134237473
Author:Stephen P. Robbins, Mary A. Coulter, David A. De Cenzo
Publisher:PEARSON